South Africa leads internet landrush, other countries spectate

About four years ago, a friend was promised to be the editor of a property magazine in one of the daily newspapers. As a good journalist, he told me about it, seeking ideas and also possible articles.

After the discussions and drinks, I suggested to the guy that there is a new kind of property in town and that he should feature it in the magazine. He was very eager to know 🙂

With a lot of exuberance, I explained that the Internet Corporation for Assigned Names and Numbers (ICANN) was discussing the third wave of the new generic Top Level Domains and that the internet was the new real estate. You can imagine the journalist’s face as he wondered what I was talking about. To him, when he said property, he meant brick and mortar, not the complicated stuff I was talking about 🙂

On wednesday, ICANN revealed that hundreds of companies had applied to run 1,930 new gTLDs and the frenzy and expectation that was online, led by ICANN followers and registry operators proved that this was the new land rush.

Africa had 17 applications and apart from Gambia and Egypt, South African companies led, with the first cities to apply- Durban, Cape Town and Joburg and Naspers, the multimedia giant with almost all its major brands- Naspers, DSTv, Multichoice, and Mnet among others.

So, as the journalist would ask, why should we care, after all, our investments are in land, houses and other tangible things.

Online real estate

One of the complaints that major brands had was that the new gTLD prog was going to force them to spend more to protect their brands. For instance, Verizon Wireless in the US spends more than $1 million buying domains in all the strings you can think of.

Another example is .tk for the tiny Island of Tokelau, off New Zealand, it provides free domains but for the premium domains such as google.tk, the company pays $5000 per domain, why? because these are rich companies 🙂

Anyway, select 100 top companies and ask them to pay $5000 and they have to because it is in their interest, and you get $500,000 per year, that is not bad. By the way, .tk has the highest number of domains among countries, commonly known as country code Top Level Domains.

Well, maybe the two points dont make sense, think of .tv for the Island of Tuvalu; how many domains have you seen that end with .tv? Of course it is a premium domain but that domain provides a large chunk of the Island’s GDP.

So, if you run that registry well, you can open sales internationally and locally and if you capitalize on numbers, you may make your money. Problem? Its capital intensive.

Protecting your brand

What would happen if Naspers had decided to ignore .naspers, and a competitor snaps it up? If they get it, the company will spend money in legal battles.

It could even be malicious characters who would make it a porn site or a site to discredit the products, depending on their experiences.

I hope you all recall the character who had set up KRA and Safaricom look alike websites and was posting all manner and sorts of nasty stuff. I wondered why the two hadn’t bought off the two domains, but again, African organizations are yet to appreciate online brand management, they just run to the registry and the ministry and before you know it, the two domains are knocked down, thats what happened.

There are some companies not concerned with registry operations, they will just keep the domain and keep off others. Other companies like Coke and Pepsi dint apply.

Localized services

If you are in a business that only targets Joburg, they it maybe easier to have a domain in that locality. This may also help in terms of search. Think of the many times you wished you get search on all the stuff that is in Nairobi.

For many, one domain is enough but there are others like those running phishing scams, domain packing, and advertising and the more the acres, the better the playing ground.

Registry services

There are domain registries that run more than five domains, especially back end services. In many cases this time round, registry services are provided by registry services companies, meaning that you dont have to start a new registry from scratch.

So, are other countries right in staying put and watching Europe and North American companies fight it out? In our case, are South African companies right?

1 COMMENT

Well South Africa was clearly prepared in this case, particularly the brands. Am sure many African brands weer not even aware of the new gTLD process. Besides, I don’t think African brands outside South Africa have the kind of global reach enjoyed by South Africans and they can’t justify establishing a whole registry to host their content. For our purposes, a .com plus a host of ccTLDs would be sufficient. Regarding other categories of new gTLDs such as “.city”, “.community” and “.generic”, I don’t think any African internet organization could have run profitable registry due to lack of critical mass of internet users and the difficulty of marketing a domain like .nairobi for example to local internet users. I think our time will come in the next application round.